U.S. Department of Labor obtains agreement with former fiduciary of SCT Yarns to restore assets to pension plans

Chattanooga, Tennessee – The U.S. Department of Labor has obtained a consent judgment and settlement agreement requiring Tim Manson to restore $35,415 to Standard Coosa Thatcher (SCT) Yarns’ retirement plans for salaried and hourly employees.

The order, issued by the U.S. District Court for the Eastern District of Tennessee, requires the defendant to restore the assets and pay a civil penalty of $7,083. In addition, Manson is barred from serving as a fiduciary to any employee benefit plan governed by the Employee Retirement Income Security Act.

“Fiduciaries of employee benefit plans have a fundamental oversight responsibility, and they cannot evade that function,” said R.C. Marshall, regional administrator for the Labor Department’s Employee Benefits Security Administration (EBSA) in Atlanta.

The lawsuit filed by the department resolved by this consent judgment alleged that that the defendant failed to provide oversight which might have uncovered serious deficiencies in Kenneth Combs’ administration of the plan, which Manson knew or should have known to exist. Combs, as the plans’ fiduciary, had been found to have committed a number of prohibited transactions, including the improper purchase of a Park City, Utah, vacation home with pension assets.

The Pension Benefit Guaranty Corp. took over the SCT Yarns retirement plans for hourly and salaried employees in 2001 from the Chattanooga-based company and is paying benefits to retirees. EBSA previously reached settlements with Costello, Strain & Co. P.C., David Johnston and Belinda Combs regarding their roles with SCT Yarns’ pension plans.

Employers with similar problems who are not yet subjects of EBSA investigations may be eligible to participate in the department’s Voluntary Fiduciary Correction Program. Participation requires employers to make workers whole but allows them to avoid EBSA enforcement actions and civil penalties as well as any applicable excise taxes.

In fiscal year 2008, EBSA achieved monetary results of $1.2 billion related to pension, 401(k), health and other benefits for millions of American workers and their families. Employers and workers can reach EBSA’s Atlanta Regional Office at 404.302.3900 or toll-free at 866.444.3272 for help with problems relating to private sector retirement and health plans. For more information, see www.dol.gov/ebsa.

Solis v. Tim Manson
(Civil Action File Number: 1:09-cv-00029)

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